Inhaled lung cancer therapy is promising because of direct and noninvasive drug delivery to the lungs with low potential for severe systemic toxicity. Thus chemotherapeutic drugs have been administered clinically by nebulization of solution or suspension formulations, which demonstrated their limited pulmonary absorption and relatively mild systemic toxicity. In all these clinical trials, however, there was no obviously superior anticancer efficacy in lung cancer patients even at the maximum doses of drugs limited by pulmonary toxicity. Therefore methods that deliver both higher anticancer efficacy and lower pulmonary toxicity are strongly desired. In addition to the worldwide availability of pressured metered dose inhalers (pMDIs) and dry powder inhalers (DPIs) to treat local respiratory diseases, recent innovations in medicines and technologies are encouraging next steps toward effective inhaled lung cancer therapy with new therapeutic or drug delivery concepts. These include the discovery of target cells/molecules and drug candidates for novel cancer therapy, the development of high-performance inhalation devices for effective pulmonary drug delivery, and the establishment of manufacturing technologies for functional nanoparticles/microparticles. This review highlights the present situation and future progress of inhaled drugs for lung cancer therapy, including an overview of available inhalation devices, pharmacokinetics, and outcomes in clinical trials so far and some novel formulation strategies based on drug delivery systems to achieve enhanced anticancer efficacy and attenuated pulmonary toxicity.